Deutsche Börse U-turn is headache for hedge funds

By

William Hutchings and

Dominic Elliott

March 14, 2005 5:00 p.m. GMT

Hedge funds are among the biggest losers as a result of Deutsche Börse's decision last week to abandon its bid for the London Stock Exchange. The funds had a net exposure to the LSE of 22% by the time the bid was dropped, according to prime brokers.

The exposure, mainly in contracts for difference, comprised long positions amounting to 25% of the LSE's shares and short positions of 3%.